ited States bonds do not form a permanent basis. Second, the market
value of these bonds and the low rate of interest make the use of capital
in the shape of circulating notes less profitable than other capital in
the bank. This is especially true in the newer communities where interest
is high, and banks so located are likely to surrender their circulating
notes at times when money loaning is most profitable, and thus cause a
fluctuating volume of currency in the country. Third, the national banks
are easily made objects of suspicion as to matters of legislation with
reference to money.

_Government banks._--Similar institutions under direct management of
government officers have often been thought of as bringing the banking
machinery within the direct judgment of the people, and so best meeting
the wants of the community as a whole. The advantages of unity and
publicity in such a system seem evident, and yet in actual practice the
safeguards against misuse of power have proved on trial less satisfactory
in such methods than in several others. The history of debased coinage
already referred to shows that men in power may easily disregard the
interests of the people, and under popular government both officers and
legal restraints are subject to changes in the interest of localities and
parties. It is possible that a stable body of experts might manage such an
institution under laws as stable as the Constitution with success. But the
restraints of law are most effective upon institutions outside official
circles.

A government bank is subject to extreme pressure from popular demand under
any financial distress to issue currency for general improvements in
public buildings, parks, etc., which can bring no return and afford no
means of redemption. Even the demand of unfortunate debtors for extended
loans may push the bank into excessive issues, and finally lead to the
scaling of debts and currency together in an effort to escape the results
of over-issue.

_Bank business._--Whatever the organization of a bank, its business must be
essentially the same. It receives deposits from its customers for safe
keeping and for convenience in use by means of checks. A check is simply
an order to pay, and, if the receiver is a customer of the bank, amounts
to merely a transfer of deposits from one owner to another on the books of
the bank. A thousand dollars safely kept in the bank vault may thus change
owners a hundred times by mean